ICAI Council Clears Two More Auditing Standards to Enhance Quality of Audits

ICAI Council Clears Two More Auditing Standards to Enhance Quality of Audits

The Council of the Institute of Chartered Accountants of India at its 286th meeting held on March 8, 2009 cleared two more Standards on Auditing (SAs), i.e., Revised SA 500, Audit Evidence and SA 720, The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements in the direction of enhancing the quality of audits.

Revised Standard on Auditing (SA) 500, Audit Evidence

Audit evidence is fundamental aspect of an audit on which the final audit opinion and the audit report is based. The quality and effectiveness of an audit is, therefore, to a large extent affected by the adequacy and appropriateness of the auditor’s procedures in gathering and evaluating the audit evidence. Though the Council of the Institute had in May 1988 issued a Standard on Audit Evidence, the Revised version of this Standard cleared today contains greater guidance for the auditors on critical aspects of audit evidence such as what constitutes sufficient appropriate audit evidence, information to be used as audit evidence, factors to consider in selecting items for testing, how to respond in case of inconsistency in or doubts over reliability of audit evidence. In other words, the Revised Standard in principles and procedures to be followed by them to obtain and evaluate audit evidence which is sufficient and appropriate for the purpose of their audit.

This Revised Standard is effective for audits of all financial statements for periods beginning on or after April 1, 2009.

Standard on Auditing (SA) 720, The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements